Gree Slumps on Lower Profit Forecast, Game Delays: Tokyo Mover

Feb. 13 (Bloomberg) -- Gree Inc., the social-network game
site operator headed by Japan’s youngest billionaire, fell the
most in more than nine months in Tokyo after cutting its profit
goal on new game delays and slower-than-expected overseas sales.

Gree declined 15 percent, the biggest drop since May 7, to
1,150 yen on the Tokyo Stock Exchange. The benchmark Nikkei 225
Stock Average lost 1 percent.

Gree, run by founder Yoshikazu Tanaka, postponed the
introduction of games including “One Piece” to the second half
of its fiscal year after having to spend time removing a feature
from existing games that was ruled illegal. Overseas sales also
missed expectations, even as the Tokyo-based company targets
foreign markets to offset rising competition at home.

The company needs to boost user activity through offering
popular titles and to demonstrate its overseas operations will
be profitable, Yuki Nakayasu, a Tokyo-based analyst at Credit
Suisse Group AG, wrote in a report.

Net income will be between 31 billion yen ($333 million)
and 37 billion yen in the year ending June 30, the company said
yesterday. It previously forecast 46 billion yen to 52 billion
yen. First-half profit fell 18 percent to 18.1 billion yen,
while sales rose 7.5 percent, Gree said yesterday. Operating
profit dropped 23 percent.

Gree cut its full-year sales forecast to as low as 160
billion yen from a minimum of 195 billion yen. The operating
profit forecast was pared to as little as 50 billion yen from at
least 74 billion yen.

The company removed a feature from online games, known as
“complete gacha,” after Japan’s Consumer Affairs Agency said
last year it planned to ban the practice under a law against
unjustifiable premiums and misleading representations. The move
hit other developers as well.